MMM v3 up in flames!!!

[BrianG]

Quick electronics lesson:

Caps have two functions: To pass/block certain AC frequencies (like in audio crossovers, oscillator tank circuits, timing, etc) and storage (like filtering power supply output). ESCs are using the main low-ESR caps (Equivalent Series Resistance) in "storage mode".

All caps have a "resistance" and when you quickly charge/discharge a cap at high current (due to the motor), the resulting high charge/discharge currents ("ripple current") along with the caps resistance creates heat. Lower resistance means less heat.

Lower quality batteries will drop voltage under load more, causing the caps to charge/discharge deeper which increases the current flow (and heat) in the cap. But, even low-ESR caps have limits and if they have too much ripple current, they will overheat and not do their jobs. Component failure and circuit instability can result.

So, you can either add in a bunch of extra low-ESR caps to help compensate, or just use a better quality battery that drops less under load.

EDIT: All that and JRH answers the question in less than two lines.